MIRA INFORM REPORT

Report Date :

16.07.2013

IDENTIFICATION DETAILS

Name :	UNIVERSAL CABLES LIMITED
Registered Office :	P.O. Biral Vikas, Satna-485005, Madhya Pradesh
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	06.03.1945
Com. Reg. No.:	10-001114
Capital Investment / Paid-up Capital :	Rs. 231.332 Millions
CIN No.: [Company Identification No.]	L31300MP1945PLC001114
TAN No.: [Tax Deduction & Collection Account No.]	JBPU00023C MUMU03691C MUMU04091D
PAN No.: [Permanent Account No.]	AAACU3547P AAACU3457P
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Subject is engaged in the manufacturing, laying, selling of Power Cables and Capacitors.
No. of Employees :	1180 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (43)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 7500000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a part of M P Birla Group. It is a well established company having a satisfactory track record. There appear losses recorded by the company. However, the net worth of the company seems to be strong. The subject gets good support from its group companies. Trade relations are reported to be fair. Business is active. Payments are reported to be usually correct and as per commitment. The company can be considered for normal business dealings at usual trade terms and condition.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	A-
Rating Explanation	Having adequate degree of safety regarding timely servicing of financial obligation. It carry low credit risk.
Date	September 2012

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office / Factory 1 :	P.O. Biral Vikas, Satna-485005, Madhya Pradesh, India
Tel. No.:	91-7672-414000 / 257121
Fax No.:	91-7672-257129 / 257131
E-Mail :	headoffice@unistar.co.in
Website :	www.unistar.co.in
Corporate Office / Marketing Office :	Industry House, 159, Churchgate Reclamation, Mumbai-400020, Maharashtra, India
Tel. No.:	91-22-44422200
Fax No.:	91-22-22027854
E-Mail :	Mumbai@unistar.co.in Mumbai.sales@unistar.co.in
Factory 2 :	Plot Nos. L – 62 to L-64 A, Verna Industrial Estate, Verna, Salcette – 403722, Goa, India
Marketing Office :	Also Located At · Allahabad · Hyderabad · Bangalore · Kolkata · Baroda · Bhopal · New Delhi · Chennai · Raipur · Goa

DIRECTORS

AS ON 31.03.2013

Name :	Mr. Harsh V. Lodha
Designation :	Chairman
Name :	Dr. S R Jain
Designation :	Director
Name :	Mr. S S Kothari
Designation :	Director
Name :	Mr. S C Jain
Designation :	Director
Name :	Mr. J C Sharma
Designation :	Director
Name :	Mr. Dinesh Chanda
Designation :	Director
Name :	Mr. D R Bansal
Designation :	Chief Mentor and Executive Director

KEY EXECUTIVES

Name :	Mr. Y S Lodha
Designation :	Chief Executive Office
Name :	Mr. Avanish Dwivedi
Designation :	Company Secretary
Audit Committee :	· Dr. S R Jain – Chairman · Mr. S S Kothari · Mr. J C Sharma · Mr. Dinesh Chanda

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.06.2013

Category of Shareholder	No. of Shares	% of No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Bodies Corporate	12239923	52.92
Sub Total	12239923	52.92
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	12239923	52.92
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	1200	0.01
Financial Institution / Banks	197354	0.85
Central Government / State Government(s)	740	0.000
Insurance Companies	811752	3.51
Foreign Institutional Investors	500	0.00
Sub Total	1011546	4.37
(2) Non-Institutions
Bodies Corporate	2670959	11.55
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Millions	3265457	14.12
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Millions	1978148	8.55
Any Others (Specify)	1964221	8.49
Trusts	1760369	7.61
Foreign Nationals	61709	0.27
Clearing Members	142143	0.61
Sub Total	9878785	42.71
Total Public shareholding (B)	10890331	47.08
Total (A)+(B)	23130254	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0
(1) Promoter and Promoter Group	0	0
(2) Public	0	0
Sub Total	0	0
Total (A)+(B)+(C)	23130254	0

BUSINESS DETAILS

Line of Business :

Subject is engaged in the manufacturing, laying, selling of Power Cables and Capacitors.

Products :

Item Code No. (ITC Code)	85.44
Product Description	Cables
Item Code No. (ITC Code)	85.32
Product Description	Capacitors
Item Code No. (ITC Code)	76.04
Product Description	Aluminium Rods
Item Code No. (ITC Code)	9001.1000
Product Description	Optical Fibre

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Electrical Cables Wires, Conductors, Strips of all types (excluding Tele-communication Cables, Wires, Conductors, Strips of all types connected with telecommunication and items reserved for small scale)	KM MCM MT	15750 200 6000	14000 150 3000	5002 9 430
Cable End Seals of Plastics	Nos.	500000	--	--
PVC Insulated Single/ multicore unsheathed cables with Cu./Al. Conductor for 650/1100 V.	CKM	200000	150000	--
Flexible Cables [for House Wiring]	KM	500000	--	--
Optical Fibre Cable	KM	50000	50000$	--
Optical Fibre Cable Accessories	Nos.	200000	--	--
Jelly Filled Telephone cables and other telecommunication cables	CKM	2500000	--	--
Pigtail and Patchcords	Nos.	450000	--	--
Fibre Re-inforced Plastic Rod	KM	200000	--	--
Optical Fibre	FKM	6000000	1500000$	321820
Aluminum Rods	MT	4800	8000	1040*
Capacitors - MFD	Pcs	5000000	1000	12
Capacitors - LT and HT	KVAr	1500000	3000000	2672870
Electrical Panels	Pcs	500	500	87
Cross Linked Polyethylene compound including insulating, semiconducting and other special grades	MT	1000	--	--

GENERAL INFORMATION

No. of Employees :

1180 (Approximately)

Bankers :

· State Bank of India

Facilities :

Secured Loan	Rs. In Millions 31.03.2013	Rs. In Millions 31.03.2012
LONG-TERM BORROWINGS
Foreign Currency Loan - Buyer's Credit – Secured	67.009	65.466
Less : Current Maturities of Long Term Borrowings	(28.375)	(63.003)
SHORT-TERM BORROWINGS
Working Capital Loans from Banks
Cash Credit Account	653.643	1181.674
Working Capital Demand Loan	750.000	0.000
Foreign Currency Loan - Buyer's Credit	139.223	198.542
TOTAL	1581.500	1382.679
NOTES LONG-TERM BORROWINGS Foreign Currency Loan - Buyer's Credit from Bank(s) are secured by hypothecation of entire present and future current assets of the Company. As collateral security, these facilities are additionally secured by way of first charge on certain immovable properties of the Company as continuing security by deposit of title deeds of such immovable properties. It is repayable within 2 years from the Balance sheet date and carries rate of Interest ranging from 2.50% - 3.50%. Long Term Foreign Currency Loan - Buyer's Credit are repayable in 3 equal Installments. SHORT-TERM BORROWINGS Working Capital Loans from Bank(s) are secured by hypothecation of entire present and future current assets of the Company. As collateral security, these facilities are additionally secured by way of first charge on certain immovable properties of the Company as continuing security by deposit of title deeds of such immovable properties.

Banking Relations :	--
Auditors :
Name :	V Sankar Aiyar and Company Chartered Accountant
Joint Ventures :	· Birla Ericsson Optical Limited (BEOL) · Birla Furukawa Fibre Optics Limited (BFL)
Enterprise which is significantly influenced by the Company :	· Vindhya Telelinks Limited (VTL)
Enterprise over which a Director is able to exercise significant influence :	· Shakun Polymers Limited (SPL)

CAPITAL STRUCTURE

AS ON 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
50000	Equity Shares	Rs.100/- each	Rs. 5.000 Millions
24500000	Preference Shares	Rs.10/- each	Rs. 245.000 Millions
	TOTAL		Rs. 250.000 Millions

Issued Capital :

No. of Shares	Type	Value	Amount
23136074	Equity Shares	Rs.10/- each	Rs. 231.361 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
23130254	Equity Shares	Rs.10/- each	Rs. 231.303 Millions
Add	Forfeited Shares		Rs. 0.029 Million
	TOTAL		Rs. 231.332 Millions

NOTES

(a) Reconciliation of the number of shares outstanding and the amount of share capital as at 31st March, 2013 and 31st March, 2012 is as under:

Description	31^st March 2013
	No of Shares	Rs. In Millions
Outstanding at the beginning of the year	23130254	231.332
Outstanding at the end of the year	23130254	231.332

(b) Terms/Rights attached to Equity Shares:

The Company has issued only one class of Shares referred to as Equity Shares having a nominal value of Rs. 10/- per share. Each holder of Equity Share is entitled to one vote per share.

(c) Details of Shareholders holding more than 5% shares in the Company is as under:

Name of the Shareholders	31^st March 2013
	No of Shares	Holding % Age
Vindhya Telelinks Limited	48,39,908	20.92
The Punjab Produce and Trading Company Private Limited	29,10,128	12.58
Gwalior Webbing Company Private Limited	16,88,573	7.30

As per of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	231.332	231.332
(b) Reserves & Surplus	1646.935	1693.496
(c) Money received against share warrants	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000
Total Shareholders’ Funds (1) + (2)	1878.267	1924.828
(3) Non-Current Liabilities
(a) long-term borrowings	38.634	2.463
(b) Deferred tax liabilities (Net)	40.555	63.964
(c) Other long term liabilities	0.413	0.584
(d) long-term provisions	22.757	22.380
Total Non-current Liabilities (3)	102.359	89.391
(4) Current Liabilities
(a) Short term borrowings	2051.256	1580.216
(b) Trade payables	1220.473	432.199
(c) Other current liabilities	430.005	442.364
(d) Short-term provisions	133.893	135.348
Total Current Liabilities (4)	3835.627	2590.127
TOTAL	5816.253	4604.346
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	1370.224	1342.825
(ii) Intangible Assets	4.651	8.204
(iii) Capital work-in-progress	50.662	0.904
(b) Non-current Investments	507.442	507.442
(c) Deferred tax assets (net)	0.000	0.000
(d) Long-term Loan and Advances	76.924	58.718
(e) Other Non-current assets	70.252	74.744
(f) Trade Receivables	210.401	206.287
Total Non-Current Assets	2290.556	2199.124
(2) Current assets
(a) Current investments	0.000	0.000
(b) Inventories	1267.905	1024.521
(c) Trade receivables	1988.104	1078.664
(d) Cash and cash equivalents	27.432	29.986
(e) Short-term loans and advances	169.772	198.481
(f) Other current assets	72.484	73.570
Total Current Assets	3525.697	2405.222
TOTAL	5816.253	4604.346

SOURCES OF FUNDS		31.03.2011
SHAREHOLDERS FUNDS
1] Share Capital		231.332
2] Share Application Money		0.000
3] Reserves & Surplus		1833.407
4] (Accumulated Losses)		0.000
NETWORTH		2064.739
LOAN FUNDS
1] Secured Loans		1452.801
2] Unsecured Loans		0.000
TOTAL BORROWING		1452.801
DEFERRED TAX LIABILITIES		138.394
TOTAL		3655.934
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1448.243
Capital work-in-progress		0.000
INVESTMENT		507.442
DEFERREX TAX ASSETS		0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1093.822
	Sundry Debtors	1024.641
	Cash & Bank Balances	26.901
	Other Current Assets	183.308
	Loans & Advances	311.530
Total Current Assets		2640.202
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	267.182
	Other Current Liabilities	461.141
	Provisions	211.630
Total Current Liabilities		939.953
Net Current Assets		1700.249
MISCELLANEOUS EXPENSES		0.000
TOTAL		3655.934

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Revenue from Operations	6189.213	6199.236	5304.819
		Other Income	81.908	84.270	151.453
		TOTAL (A)	6271.121	6283.506	5456.272
Less	EXPENSES
		Cost of Raw Materials Consumed	4592.493	4533.155	3387.747
		Purchase of Stock-in-trade	207.002	335.463	283.526
		Employee Benefits Expense	415.015	367.654	359.131
		Other Expenses	741.092	951.042	817.163
		(Increase) in Inventories of Materials under Process, Finished Goods, Scrap and Traded Goods	(19.517)	(81.320)	65.243
		TOTAL (B)	5936.085	6105.994	4912.810
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		335.036	177.512	543.462
Less	FINANCIAL EXPENSES (D)		256.864	239.726	109.585
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		78.172	(62.214)	433.877
Less/ Add	DEPRECIATION/ AMORTISATION (F)		147.688	148.101	165.683
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		(69.516)	(210.315)	268.194
Less	TAX (H)		(23.289)	(71.014)	90.203
	PROFIT / (LOSS) AFTER TAX (G-H) (I)		(46.227)	(139.301)	177.991
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		490.718	630.019	530.571
Less	APPROPRIATIONS
		Transfer to General Reserve	0.000	0.000	25.000
		Proposed Dividend	0.000	0.000	46.261
		Corporate Dividend Tax	0.000	0.000	7.282
	BALANCE CARRIED TO THE B/S		444.491	490.718	630.019
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	30.926	258.359	145.317
		Claims From Vendors	0.200	0.225	0.367
		Other Earnings	0.000	0.000	0.849
	TOTAL EARNINGS		31.126	258.584	146.533
	IMPORTS
		Raw Materials	984.612	2502.101	1733.716
		Stores & Spares	7.576	11.051	10.308
		Capital Goods	110.735	22.857	165.627
		Goods Purchased for Resale	68.638	4.786	72.040
	TOTAL IMPORTS		1171.561	2540.795	1981.691
	Earnings / (Loss) Per Share (Rs.)		(2.00)	(6.02)	7.70

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(0.74)	(2.22)	3.26
Net Profit Margin (PBT/Sales)	(%)	(1.12)	(3.39)	5.06
Return on Total Assets (PBT/Total Assets}	(%)	(1.32)	(5.13)	6.56
Return on Investment (ROI) (PBT/Networth)		(0.04)	(0.11)	0.13
Debt Equity Ratio (Total Debt /Networth)		1.11	0.82	0.70
Current Ratio (Current Asset/Current Liability)		0.92	0.93	2.81

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	No
8]	No. of employees	Yes
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	-----
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	Yes
21]	Market information	-----
22]	Litigations that the firm / promoter involved in	-----
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	-----
26]	Buyer visit details	-----
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	No
31]	Date of Birth of Proprietor/Partner/Director, if available	No
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

Unsecured Loan	Rs. In Millions 31.03.2013	Rs. In Millions 31.03.2012
SHORT-TERM BORROWINGS
Other Short-term Loans
Loan From a Bank (repayable on demand)	203.522	0.000
Loan From Bodies Corporate (repayable on demand)	304.868	200.000
TOTAL	508.390	200.000

NATURE OF OPERATIONS

Subject, an M. P. Birla Group Company is engaged in the manufacturing, laying, selling of Power Cables and Capacitors.

GENERAL AND CORPORATE MATTERS

Despite stiff competition during the year, the Company has been able to register slightly higher gross revenue at Rs. 6929.100 Millions as compared to Rs. 6816.200 Millions for the previous fiscal.

In terms of EBIDTA also, the Company witnessed significant improvement at Rs. 335.000 Millions as compared to Rs. 177.500 Millions for the previous year.

Although the increase in overall revenue, has helped the Company to contain its net loss at Rs. 46.200 Millions as against Rs. 139.300 Millions for the year 2011-12, intense competition leading to compromise in margins, longer working capital cycle due to financial strife faced by the ultimate customers in the power sector, higher finance costs on account of liquidity crunch and elevated input prices have hindered resilience of the Company to overcome its subdued performance in the previous fiscal.

The power sector which is inextricably intertwined with the country's economic development still remains a weak spot. Despite major reforms in place, the power sector, being plagued with multifaceted problems such as fuel scarcity, shortage of equipments, infrastructural constraints, etc. has been perennially lagging behind its target, thereby exposing the economic development to a major risk. The hydrocarbon fuel linkage for the power plants, which is the mainstay for conventional power, is in a diabolic state. Even the nuclear energy remains shrouded with uncertainties. In this sector, the Industry does not see any cataclysmic change in the immediate future. There is an air of uncertainty of the industry either re-entering into recession or enduring a prolonged period of low demand growth.

Though the economy is on low ebb, there is a silver lining of a good potential that imminently lies ahead for meeting the rising per capita energy demand which gives the industry a redeeming hope of a sustainable demand spiral. Economic recession is no stranger to the Company, it has passed through cyclical phases of low demand where the Company has shown indefatigable spirit, resilience and unending zest to emerge as a strong player.

The Company in its quest for future products deserves the credit for developing 400kV cable, the highest achieved level in the world for underground cables, which has a promising future for power sub-transmission networks. This achievement is the first of its kind by an Indian manufacturer. This development inarguably pitchforks the Company into the top echelon of global players.

The Company's Capacitor Division is also progressing well and growing by developing new products for better value addition.

JOINT VENTURE

Birla Furukawa Fibre Optics Limited (BFL), a joint venture between the Company and Furukawa Electric Company Limited, Japan, is rapidly gaining momentum to capitalize on the emerging business opportunities in the optical fibre market with the underlying objective of providing world class products to the customers through state-of-the-art manufacturing processes and facility.

The telecom market in India is opening up exciting possibilities with the imminent launch of 4G networks, bringing India at the same level as some of the first countries in the world to embark commercially on this ground breaking technology. Pricing pressures however, continue to pose challenges to the Optical Fibre Industry.

BFL has recorded considerable growth in its operations notwithstanding that it is just a three years old Company.

The directors are pleased to inform that Birla Ericsson Optical Limited, a venture promoted by the Company in association with Vindhya Telelinks Limited and Ericsson Cables AB, Sweden has shown significant improvement in the financial performance during the year.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company prides itself of being in the vanguard of the Indian Power Cables and Capacitors industry. With a sense of strong commitment for continuous technology up-gradation, the Company has been steering itself to higher realms of technology, always ensuring to stay ahead of competition.

The Company's iconic Brand, "Unistar", synonymic to "uncompromised quality" maintains its sheen as ever and is recognized as the most trusted name in the industry. The Company has been continuously re-modelling its strategic manoeuvres while addressing the pressing challenges confronting the Industry at various points of time. The Company with its overarching goal to bring value to its customer has etched a reputation for delivering quality products, meeting customer satisfaction and constantly moving up the technology ladder.

In this complex and demanding market place where it is imperative to address the customer's changing needs during changing times, the Company with certitude believes that a customer-centric approach is central to its long term success and has therefore been constantly aligning the Company's strategy with customer values.

The financial year began with indications of a modest economic revival which gave the Industry a glimmer of hope for an improved market demand. The infrastructural segment painted a positive outlook giving the industry a "go signal". However, the industry sentiments were short lived as the Government was gripped by the "policy paralysis", bringing a deadlock to the decision making process stalling the economic growth at a critical juncture. This phenomenon eventually drifted across a wide section of infrastructural industries bringing a large number of on-going projects to a grinding halt and future ones to a stillborn status.

The political inaction, policy deadlock and instability in the financial system have dragged on for far too long which has not been conducive to the investor confidence. Not surprising, this situation has further exacerbated with the "risk-off" attitude of investors. Even the global investors who were once salivating over the country's infrastructural opportunities have switched to a wait-and-watch mode. The industry sentiments remains disenchanted with the dark shadow cast over the economy, sinking the hope of an emerging buoyant market. This leaves the industry obsessively concerned with the future scenario.

The longstanding economic duress has put the industry's patience on test for long, weakening its faith. As a consequence of losing hope on an immediate economic upturn and the possibility of a demand rebound, industry players are conceding to the option of making a footprint on the overseas market as a logical element of their strategic plan for growth.

The Company recognized that it needs to de-risk itself from a polarized high-end market segment and stretch out to a broader market base to offset the market aberrations. With this in mind, the Company staged a strategic manoeuvre, incisively aimed at recovering its lost ground in the high volume medium and low voltage market segment.

With the intensification of the competitive climate in the market, the Company acknowledges that the manufacturing cost structure has always been the "Achilles heel" of the Company which needs immediate attention. With this in perspective, the Company has taken a strategic viewpoint to transform itself to a high-volume cost-competitive manufacturing base. To strengthen its manufacturing vertical, the Company is expanding its medium voltage capacity by installing an additional Continuous Catenary Vulcanizing (CCV) line. Concurrently, to supplement the capacity constraints, the overall down-stream manufacturing facilities are also under augmentation. With the addition of this infrastructure, it would facilitate sustainable growth in the topline from which the Company clearly envisages a virtuous cycle of multiple gains enabling it to transform into a cost competitive manufacturing base. With the installation of the 2nd CCV line, the Company would have a unique flexible manufacturing range which could cater to asymmetric demand patterns of EHV and MV power cable market segments. Needless to mention, the Company would achieve maximum mileage when both segments have a buoyant demand. More so, with the integration of the global market, the cost-effective manufacturing augurs well in favour of the Company's future growth prospects.

Another serious concern faced by the Industry is the acute crisis of liquidity in the market which has given rise to delayed payments. This is accompanied with the cascading effects of high borrowing interest rates and credit crunch. The Company is carefully weighing its option to accept contracts which are not conducive to its business operation and can hamper its cash flow.

The Company has been successful in driving the top-line growth despite the nonchalant market. In the process, the Company has been successful in reducing the input raw material cost with better bargaining power and scaling down the manufacturing cost by optimizing the down time and improvement in productivity. With sharp focus on logistics, there has been improvement in the cash-to-cash cycle.

The Company is in the process of relocating its manufacturing facilities for winding wires to its Goa location where other synergic light duty cables are also planned for manufacturing.

In a bid to step out into the overseas market, the Company is aggressively attempting to secure overseas business. The Company has been successful in winning a contract for cables for a prestigious project in Oman.

PRODUCT-WISE PERFORMANCE, OPPORTUNITIES, THREATS AND BUSINESS OUTLOOK

POWER CABLES AND CAPACITORS

Gross revenue from this segment during the year was Rs. 6929.100 Millions as compared to Rs. 6595.700 Millions during the previous year.

EHV POWER CABLES

The EHV segment showed a depressed demand. Nevertheless, in the forthcoming year, the demand outlook is much better. The implementation of underground transmission, though unavoidable, is an expensive option, therefore decision making for project implementation takes its own course of time. This has been the major cause for the cyclical demand pattern for EHV cable.

Balancing the demand-supply equation is one of the main challenges of the power sector in order to deliver power to the consumer's door-step. With the rise in the per capita demand, a huge chasm of imbalance between power generation and distribution needs to be bridged. Mega EHV power transmission corridors are being constructed across the length and breadth of the country for evacuation and transmission of power to the distribution nodes. This is implicitly encouraging for the Company as these large transmission lines entering in the metropolis have to be dovetailed with the EHV underground subtransmission networks within and around the metro-cities and satellite towns. Notably, the infrastructure in the underground transmission segment is in its embryonic stage. Considering the ecological embargo and space constraints for constructing overhead transmission lines within metropolis and its proximity, underground EHV transmission has earned priority, as this is the only means to infuse power into the urban areas. This phenomenon would inevitably drive the demand of EHV cables through the growth curve.

The Company having envisioned this scenario had installed two state-of-the-art Vertical Continuous Vulcanising (VCV) lines, the only of its kind in India, to cater to this market segment. With technology from Furukawa Electric Company Limited, Japan, the Company has rapidly made in-roads in the 220kV market segment and is now advancing towards the 400kV segment, the highest voltage in the underground transmission system. The Company also having institutionalized an engineering and construction wing is expanding its activities in undertaking turnkey solutions in underground EHV cable transmission projects in line with the present market trend in this segment.

RUBBER CABLES FOR ORIGINAL EQUIPMENT MANUFACTURERS AND INDUSTRIES

The Company has an impressive product line-up of speciality cables and is well established as the technology leader. It has been serving the original equipment manufacturers (OEMs) and a wide spectrum of industries. The important segments are railways, steel plants, petrochemical plants, cement plants, oil rig manufacturers, ship building and mining industry. In the power sector, the renewable energy is one of the key demand drivers of rubber cables where the Company holds a significant market share. It is also in the process of developing photovoltaic cables for solar farms. In the conventional energy sector, the Company has a strong dominance on niche products for special applications. This market segment is a thrust area for the Company where it intends to expand its market share. In terms of manufacturing technology, here again, the Company with its Pressurized Liquid Salt Bath Curing (PLCV) technology, the only of its kind in India, holds the leading edge over its competitors.

MV POWER CABLES

While the EHV demand took a setback, the MV demand has more or less been constant. During the past few years, the Company had been constantly losing ground as it had been focussing mainly in the high-end EHV segment. The Company took concerted action to stage a come-back and has increased its market share which has largely contributed to its top-line. The pressure on the market prices are constantly heaping up. In the present scenario, as a result of constant capacity augmentation by industry players and foray into the market by new entrants, the installed manufacturing capacity of the industry outstrips the demand. Nevertheless, this is a potential segment poised for accelerated growth once the power sector investments are on full stream. Moreover, the investments in the other core industry segments would add vibrancy to the demand.

LV POWER CABLES

The market has gradually commoditized with major demand of the industry being catered by dealers and distributors. The LV market remains inundated with a plethora of regional players. The market space continues to be over-crowded with a deluge of inferior quality products. Though the demand is expected to grow in consonance with the investments in the power generation and distribution sector, improvements in the price levels are not foreseen. The company has restricted its market share in this segment and diverted its energy and resources in the higher value-added products. Notwithstanding, the Company maintains its focus mainly on project requirements where the regional players with inadequate quality standard are screened out. In keeping with the market trend, the Company also plans to reinforce its dealer and distribution network.

EXPORT

The Company maintains its status as a "Star Export House". The Company is the member of the Federation of Indian Export Organization (FIEO) as manufacturer exporter which gives the Company a formidable recognition as a manufacturer and exporter.

OVERSEAS COMPETITION

Though a few international players have set up manufacturing plants in India, other international players from Europe, South East Asia and Far East are keenly observing the Indian market ready to set up manufacturing bases at the opportune moment. These players are keen mainly on the high-end products. As the dust settles down with the economic revival, it is expected that more international players would make a foray in the Indian market space. The Company is confident to face the challenges from the international competition as it is technically at par with the best-of-class global players.

CAPACITORS

With growth in the Power Sector and consequential increase in Mega Watts (MW), addition of MVArs (Capacitors) to improve power factor and the efficiency of power utilization has a bright prospect for growth. Avenues for Capacitors Segment are also good in view of focus on power quality, harmonic mitigation and thrust for improvement in productivity.

Besides Capacitors, the Company has developed Capacitor Switches up to 12 kV, the demand prospects for which are fair. In LT Range the Company is developing LT MPP Gas filled and Resin filled Capacitors, a product that has better synergy with its current product portfolio.

Rising input costs coupled with intense competition have been the major concerns for the Company's products in Capacitors Segment

FINANCIAL REVIEW

The financial performance of the Company during the year 2012-13 can be ascertained from the following key indicators

Ø There has been a Loss in the current fiscal of Rs. 46.200 Millions as compared to a Loss of Rs. 139.300 Millions in the previous year which is mainly due to severe liquidity crunch, flaring prices of inputs and pressure on the market prices which is constantly heaping up.

Ø Despite continued endeavour to contain, financial cost at Rs. 256.900 Millions has increased by Rs. 17.100 Millions from the previous year on account of increased borrowings for working capital requirements due to enhanced business volume and delayed payment from customers, hampering cash flow.

Ø Total Borrowings increased by Rs. 472.600 Millions mainly due to increase in Working Capital requirement

Ø The market value of quoted investment increased to Rs. 764.900 Millions from Rs. 599.000 Millions in the previous year.

Ø The level of inventories has increased from Rs. 1024.500 Millions to Rs. 1267.900 Millions mainly because of increase in work-in-progress

Ø Trade Receivables increased to Rs. 2198.500 Millions as on 31st March, 2013 as compared to Rs. 1284.900 Millions as at the end of the previous year mainly due to retention of money by customers in Turnkey Contracts and delayed payments from some of the customers as per evolving industry norms

Ø The Company is now in the process of realizing Industrial Investment Promotion Assistance from the State Government. The first three year's benefits have since been realized. The total amount of such Assistance as on 31st March, 2013 is Rs. 106.000 Millions.

Ø The level of Current Liabilities have increased due to shift from Buyer's Credit to Supplier's Credit

FIXED ASSETS

· Freehold Land

· Leasehold Land

· Buildings

· Plant and Machinery

· Office Equipments

· Furniture and Fixtures

· Vehicles

· Computer Software

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 60.05
UK Pound	1	Rs. 90.71
Euro	1	Rs. 78.47

INFORMATION DETAILS

Report Prepared by :

DPT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		43

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.